When I discovered a polity full of SMEs and resilient lifestyle businesses, I immigrated here.
Some vague thoughts from a few decades of trying to figure out specifically why it seems to work so much better than the Old Country:
Resilient family farms: that is indeed hefty regulation, as well as willingness to forgo the last percentage point or two of economic efficiency.
Resilient lifestyle businesses: the apprenticeship system plays some role here, and I bet the same consideration to efficiency applies?
I guess part of it depends upon who's making the investment decisions:
- Owners are often happy to shave off a few percentage points in favour of intangible benefits.
- Workers (here, the term includes outside management) are less happy, as they're agents, and a few points for the owner may be 20-50% of the agents' vig.
- Finance types run at full efficiency or nothing, as their entire business is built around picking up nickels in front of the steamroller, you can't expect them to leave nickels around that are only in the path of tricycles.
Final thought: if you want a lot of new businesses, fast, you're going to get "late capitalism" and the goods & services equivalent of row crops.
If you've had your economy for some time and are just fiddling at the edges for growth, you can have a bunch of lifestyle businesses, the goods & services equivalent of orchards.
(I once lived in a neighbourhood in the Old Country that still had corner stores, because it was older than the automobile, and although "late capitalism" prevents corner stores from arising in new neighbourhoods it's more or less neutral towards existing ones)
EDIT: for exact identities, see https://news.ycombinator.com/item?id=39861369 and my comment history more generally, or https://en.wikipedia.org/wiki/Richard_Scarry#Personal_life_a...
Lagniappe: https://www.youtube.com/watch?v=reuJ8yVCgSM (2017)